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Asociación en participación (A. en P.) in Mexico: the contractual joint venture, its legal effects and its tax treatment as an entity

Last verified: 2026-10-26 · Status: Stable

The asociación en participación is a written contract in which one party (the asociante) gives others who contribute assets or services a share of the profits and losses of a business or of specific deals; it has no legal personality, name or registration. The asociante acts in its own name, third parties deal only with it, and contributed assets belong to the asociante toward third parties unless otherwise agreed and registered; partners' losses are capped at their contribution. For tax, however, an A. en P. that carries on business in Mexico is treated as a legal person resident in Mexico, with the same obligations as a company, an RFC under its own name followed by "A. en P.", and the asociante filing for it.

USD figures use MXN 18.5026 per US dollar, the Federal Reserve H.10 noon buying rate for 16 October 2026 (FRED series DEXMXUS), the latest official observation verified for this page. Conversions are for orientation only.

Key facts

Legal personality of an asociación en participación under commercial law	None textLGSM art. 253, as of 2026-10-26 · in force
Registration required for the A. en P. contract	No; written form only textLGSM art. 254, as of 2026-10-26 · in force
Treated as a legal person for tax when carrying on business in Mexico	Yes textCFF art. 17-B, as of 2026-10-26 · in force
Maximum loss of an associate	Value of the associate's contribution textLGSM art. 258, as of 2026-10-26 · in force

The rule

1. What the contract is. An asociación en participación is a contract by which one person grants others, who contribute assets or services, a share of the profits and losses of a commercial business or of one or more commercial operations.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Art. 252, 1934-08-04 official text · verified 2026-10-26

2. No legal personality, no registration. The A. en P. has no legal personality and no firm name or corporate name. The contract must be in writing and is not subject to registration; it sets the terms, interest proportions and other conditions.
Cost to do it: No notary or registry is legally required for the contract itself.
Example: No mandatory government fee for the contract. / No mandatory government fee for the contract.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 253, 254 and 255, 1934-08-04 official text · verified 2026-10-26

3. Who third parties deal with. The asociante acts in its own name and there is no legal relationship between third parties and the associates. Toward third parties, contributed assets belong to the asociante unless the nature of the contribution requires another formality, or the parties agree otherwise and register the clause in the Public Registry of Commerce where the asociante trades; an unregistered clause still binds a third party who knew or should have known of it.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 256 and 257, 1934-08-04 official text · verified 2026-10-26

4. Profit and loss sharing and loss cap. Unless agreed otherwise, profits and losses are shared under the general LGSM rule (capital partners in proportion to contributions; a services partner takes half the profits and no losses). Associates' losses may not exceed the value of their contribution. Absent specific terms, the A. en P. operates, dissolves and is liquidated under the rules for general partnerships, as far as compatible.
Example: An associate contributes MXN 3,000,000 to a construction project. If the project loses MXN 6,000,000, the associate's loss is capped at MXN 3,000,000. / An associate contributing about USD 162,139 can lose at most that amount.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 16, 258 and 259, 1934-08-04 official text · verified 2026-10-26

5. Taxed as a legal person. For tax purposes an A. en P. is the group of persons carrying on business under the contract and sharing its profits or losses. It has legal personality for tax law when it carries on business in Mexico, when the contract is governed by Mexican law, or when it meets the residence tests of CFF art. 9, and in those cases it is a Mexican resident. It must meet the same tax obligations as a legal entity; the asociante represents it for tax purposes and in tax disputes; it is identified by a name followed by "A. en P." (or the asociante's name followed by those letters) and has its domicile at the asociante's.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Art. 17-B, 1981-12-31 official text · verified 2026-10-26

6. Income tax law treats it as a company. The Income Tax Law includes the A. en P. among legal persons when it carries on business in Mexico, and counts participations in an A. en P. as shares; resident legal persons, including the A. en P., are subject to corporate income tax.Ley del Impuesto sobre la Renta (Income Tax Law, LISR), DOF 11 December 2013, last reform DOF 1 April 2024, Arts. 7o. and 16, 2013-12-11 official text · verified 2026-10-26

7. Foreign associates and the RFC. Foreign resident associates of an A. en P. need not register in the RFC if the Mexican resident asociante files, within the first three months after each fiscal year ends, a list of the foreign associates with their address, tax residence and tax identification number.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Art. 27, section A, paragraph on partners, shareholders and associates resident abroad, 1981-12-31 official text · verified 2026-10-26

8. Not available for the simplified company regime. Companies that carry on activities through a trust or an asociación en participación cannot use the RESICO regime for companies.Ley del Impuesto sobre la Renta (Income Tax Law, LISR), DOF 11 December 2013, last reform DOF 1 April 2024, Art. 206, fraction II, 2021-11-12 official text · verified 2026-10-26

9. Beneficial owner duties cover contracts too. The CFF beneficial owner duties apply not only to companies and trusts but to the parties to any other legal arrangement, which reaches the asociante and associates of an A. en P.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Arts. 32-B Ter and 32-B Quáter (added DOF 12 November 2021), 2021-11-12 official text · verified 2026-10-26

Point	Commercial law (LGSM)	Tax law (CFF and LISR)
Personality	None (art. 253)	Legal person resident in Mexico when doing business there (CFF art. 17-B)
Name	None (art. 253)	Name followed by "A. en P." (CFF art. 17-B)
Form	Written contract, not registered (art. 254)	Same obligations as a company; asociante files (CFF art. 17-B)
Third parties	Deal only with the asociante (art. 256)	Asociante represents the A. en P. (CFF art. 17-B)
Associate losses	Capped at contribution (art. 258)	Not applicable
Foreign associates	No rule	RFC exemption if the asociante files the yearly list (CFF art. 27)

Asociación en participación: commercial law versus tax law

Worked example

A Canadian investor and a Mexican developer agree to build and sell a residential project. The developer is asociante and holds the land and permits; the investor contributes MXN 3,000,000 (about USD 162,139) for 40 percent of profits and losses (LGSM arts. 252 and 255).
Buyers and contractors contract only with the developer (art. 256). The investor's loss is capped at its MXN 3,000,000 (art. 258).
For tax, the A. en P. is a Mexican resident legal person (CFF art. 17-B): the developer registers it in the RFC as "Residencial Lomas, A. en P.", files its returns and pays corporate income tax on project profit (LISR arts. 7o. and 16).
The developer files the yearly list of the Canadian associate within three months of year end so the investor need not register in the RFC (CFF art. 27).

Step by step

1. Decide whether a contract (A. en P.) or a joint venture company suits the deal: the contract keeps assets and contracts with the asociante, while a company gives each party shares and a board.
2. Draft the written contract with contributions, profit and loss shares, management, information rights, term and liquidation (LGSM arts. 254, 255 and 259).
3. If contributed assets should remain the associate's, register that clause in the Public Registry of Commerce where the asociante trades (art. 257).
4. Register the A. en P. in the RFC under its own name with the "A. en P." suffix, and keep its accounting separate (CFF art. 17-B).
5. File the foreign associate list each year within three months of year end (CFF art. 27) and keep the beneficial owner file (CFF art. 32-B Ter).

Common traps

Assuming tax transparency. Unlike many foreign joint venture contracts, an A. en P. doing business in Mexico is a taxpayer in its own right (CFF art. 17-B; LISR art. 7o.).
Unregistered asset clause. Without registration, assets contributed are the asociante's toward third parties who did not know of the clause, exposing them to the asociante's creditors (LGSM art. 257).
No direct claims. Associates have no legal relationship with third parties and must rely on the asociante (LGSM art. 256).
RESICO exclusion. Activities through an A. en P. cannot use the simplified company regime (LISR art. 206, fraction II).

Sources

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